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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 7, 1999
ICHOR CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State of Incorporation)
000-25132 25-1741849
(Commission File Number) (I.R.S. Employer Identification No.)
Suite 1250, 400 Burrard Street, Vancouver, British Columbia V6C 3A6
(Address of principal executive offices, including postal code)
(604) 683-5767
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On December 7, 1999, ICHOR Corporation ("ICHOR") completed the sale and
issuance of 97,206 shares of 5% Cumulative Redeemable Convertible Preferred
Stock, Series 2 in consideration of debt forgiveness of $972,060.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit
Number Description
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4.1 Certificate of Designations.
10.1 Debt Settlement Agreement between Drummond Financial
Corporation and ICHOR Corporation dated November 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ICHOR CORPORATION
By: /s/ Roy Zanatta
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Roy Zanatta
Secretary
Date: December 7, 1999
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ICHOR CORPORATION
FORM 8-K
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Certificate of Designations.
10.1 Debt Settlement Agreement between Drummond Financial
Corporation and ICHOR Corporation dated November 30, 1999.
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CERTIFICATE OF DESIGNATIONS
ICHOR CORPORATION
ICHOR Corporation, a Delaware corporation (the "Corporation"), desires to
designate the rights and preferences of a series of preferred stock (the
"Series 2 Preferred Stock") in accordance with the Corporation's Certificate
of Incorporation and Section 151 of the Delaware General Corporation Law.
Roy Zanatta, Director of the Corporation, hereby certifies the following:
1. This Certificate is the act and deed of Roy Zanatta, Director of
the Corporation. The facts stated in this Certificate are true.
2. The resolutions attached as Exhibit A were duly adopted by the board
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of directors effective November 30, 1999.
3. The number of shares of Series 2 Preferred Stock to which the
resolutions at Exhibit A apply is 100,000 shares.
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DATED December 6, 1999.
/s/ Roy Zanatta
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Roy Zanatta
Director
DATED December 6, 1999.
/s/ Karim Lalani
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(Signature of Notary)
Karim Lalani
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(Legibly Print or Stamp Name of Notary)
Notary public in and for British Columbia, Canada ,
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residing at Vancouver, British Columbia
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My commission expires at the pleasure of her
majesty the Queen in the Right of the Province of
British Columbia
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EXHIBIT A
DIRECTORS' RESOLUTIONS
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BE IT RESOLVED THAT:
1. A second series of Preferred Stock be and is hereby designated as "5%
Cumulative Redeemable Convertible Preferred Stock, Series 2" (the
"Series 2 Preferred Stock").
2. The number of Series 2 Preferred Stock in the capital of the
Corporation be and is hereby fixed at 100,000.
3. The Series 2 Preferred Stock shall have attached thereto the special
rights and restrictions, as a series, in substantially the form set out
in Schedule "A" hereto, with such changes, additions and alterations
thereto as the President or Secretary may deem necessary or desirable,
and that the constating documents of the Corporation be amended as
necessary to incorporate same.
4. Any one director or officer of the Corporation be and is hereby
authorized to execute and deliver the Certificate of Designations
relating to the Series 2 Preferred Stock for and on behalf of the
Corporation.
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SCHEDULE "A"
The second series of Preferred Stock, designated 5% Cumulative Redeemable
Convertible Preferred Stock, Series 2 (the "Series 2 Shares") shall have
attached thereto, in addition to the rights, privileges, restrictions,
conditions and limitations attaching to the Preferred Stock as a class, the
following rights, privileges, restrictions and conditions (the "Series 2
Provisions"):
1. GENERAL
1.1 Definitions
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Where used in these Series 2 Provisions, the following words and
phrases shall, unless there is something in the context otherwise inconsistent
therewith, have the following meanings, respectively:
(a) "business day" means a day other than a Saturday, Sunday or any other
day treated as a holiday in the State of Delaware;
(b) "close of business" means the normal closing hour of the principal
office of the transfer agent for the Series 2 Shares;
(c) "Common Shares" means the Common Shares in the Corporation as such
shares were constituted on November 30, 1999, or as such shares may be
changed from time to time, provided that any adjustment in the
Conversion Rate required by clause 3.5 hereof has been made;
(d) "Conversion Price" means 90% of the Current Market Price;
(e) "Conversion Rate" means at any time the number of Common Shares into
which one Series 2 Share may be converted at such time in accordance
with the provisions of Section 3;
(f) "Current Market Price" of the Common Shares on any date means the
arithmetic weighted average of the closing prices for sales of Common
Shares on the designated exchange based upon the 20 day average closing
trading price on the designated exchange, provided that in the event
that the Common Shares are not listed on any stock exchange or through
any quotation system, Current Market Price shall be determined by the
board of directors of the Corporation, which determination shall be
conclusive;
(g) "designated exchange" means on any date, the stock exchange or
quotation system through which the largest number of Common Shares of
the Corporation traded over the 20 trading day period immediately
preceding such date;
(h) "director" means a director of the Corporation for the time being and
"directors" or "board of directors" means the board of directors of the
Corporation or, if duly constituted and
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empowered, the executive committee of the board of directors of the
Corporation for the time being, and reference, without further
elaboration, to action by the directors means either action by the
directors of the Corporation as a board or action by the said executive
committee as such committee;
(i) "herein", "hereto", "hereunder", "hereof", "hereby" and similar
expressions mean or refer to these Series 2 Provisions and not to any
particular Section, clause, subclause, subdivision or portion hereof,
and the expressions "Section", "clause" and "subclause" followed by a
number or a letter mean and refer to the specified Section, clause or
subclause hereof;
(j) "Initial Issue Date" means the first date on which any Series 2 Shares
are issued and outstanding;
(k) "Issue Price" means $10.00 per Series 2 Share;
(l) "Junior Shares" means any shares in the capital of the Corporation
ranking after or subordinate to the Series 2 Shares as to the payment
of dividends or the return of capital, including, without limiting the
generality of the foregoing, the Common Shares;
(m) "Liquidation Distribution" means the distribution of assets of the
Corporation on the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other
distribution of assets of the Corporation among its shareholders for
the purpose of winding up its affairs;
(n) "ranking as to capital" means ranking or priority with respect to the
distribution of assets in the event of a Liquidation Distribution;
(o) "Series 1 Shares" means the first series of Preferred Stock, designated
5% Cumulative Redeemable Convertible Preferred Stock, Series 1, of
which 467,500 are issued and outstanding as at November 30, 1999;
(p) "Series 1 Holder" means a person recorded in the securities register of
the Corporation as being the registered holder of one or more Series 1
Shares;
(o) "Series 2 Holder" means a person recorded on the securities register of
the Corporation as being the registered holder of one or more Series 2
Shares;
(p) "trading day" means any day on which the designated exchange is open
for business and on which the relevant class of shares of the
Corporation are traded; and
(q) "transfer agent" means the corporation or corporations from time to
time appointed by the directors as the transfer agent for the Series 2
Shares and, in the event that no such person is appointed, "transfer
agent" means the Corporation.
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1.2 Gender, etc.
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Words importing only the singular number include the plural and vice
versa and words importing any gender include all genders.
1.3 Currency
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All monetary amounts referred to herein shall be in lawful money of the
United States.
1.4 Headings
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The division of these Series 2 Provisions into sections, clauses,
subclauses or other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation hereof.
1.5 Business Day
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In the event that any date upon which any dividends on the Series 2
Shares are payable by the Corporation, or upon or by which any other action is
required to be taken by the Corporation or any Series 2 Holder hereunder, is
not a business day, then such dividend shall be payable or such other action
shall be required to be taken on or by the next succeeding day which is a
business day.
2. DIVIDENDS
2.1 Declaration and Payment of Dividends
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The holders of Series 2 Shares shall be entitled to receive and the
Corporation shall pay thereon, as and when declared by the board of directors
out of funds legally available for such purpose, fixed preferential cumulative
cash dividends at the rate of $0.50 per share per annum. Such dividends shall
accrue, whether or not earned or declared, from and including the date of
issue of such shares and, subject as hereinafter provided, shall be payable in
equal quarterly installments of $0.125 per share on the last day of each of
March, June, September and December in each year (each of which date is
hereinafter referred to as a "dividend payment date"). The first dividend
payment date shall be December 31, 1999. In the event that the Corporation
does not have sufficient funds legally available for the purpose of payment of
dividends to allow full payment of dividends to Series 1 Holders and Series 2
Holders on any dividend payment date, payment of dividends on such date shall
be made pro rata and pari passu to the holders of the Series 1 Shares and the
Series 2 Shares.
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2.2 Amount of Dividend
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The amount of the dividend for any period which is less than a full
quarter with respect to any Series 2 Share:
(i) which is issued, redeemed or purchased; or
(ii) where assets of the Corporation are distributed to the Series 2
Holders pursuant to Section 6 hereof;
shall be equal to the amount calculated by multiplying $0.125 by a fraction
the numerator of which is the number of days in such quarter for which such
share has been outstanding (including the dividend payment date at the
beginning of such quarter if such share was outstanding on that date excluding
the next succeeding dividend payment date if such share was outstanding on
that date), and the denominator of which is the number of days in such quarter
(including the dividend payment date at the beginning thereof and excluding
the next succeeding dividend payment date).
The amount of dividend payable in respect of each Series 2 Share on the
first dividend payment date following the Initial Issue Date shall be that
proportion of $0.125 which the number of days from and including the Initial
Issue Date to but excluding such dividend payment date is to the total number
of days in the 3 month period immediately preceding such dividend payment
date.
2.3 Cumulation of Dividends
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If on any dividend payment date a dividend accrued to and payable on
such date is not paid in full on the Series 2 Shares then issued and
outstanding, the dividend or the unpaid part thereof shall be paid on a
subsequent dividend payment date or dividend payment dates determined by the
board of directors on which the Corporation shall have sufficient moneys
legally available for the payment of the same. The Series 2 Holders shall not
be entitled to any dividends other than or in excess of the fixed preferential
cumulative dividends provided for in this Section 2.
3. CONVERSION
3.1 Right to Convert
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Upon and subject to the terms and conditions hereinafter set forth, the
holders of Series 2 Shares shall have the right, at any time and from time to
time, up to the close of business on November 30, 2004, or, in the case of
Series 2 Shares called for redemption, to the close of business on the
business day immediately preceding the date fixed for redemption, whichever is
earlier (provided, however, that if the Corporation shall fail to redeem such
Series 2 Shares in accordance with the notice of redemption the right of
conversion shall thereupon be restored as if such call for redemption had not
been made), to convert all or any part of their Series 2 Shares into fully
paid and non-assessable Common Shares, at the Conversion Rate in effect on the
date of conversion. Unless
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and until adjusted in accordance with these Series 2 Provisions, the
Conversion Rate shall be equal to the quotient obtained when the Issue Price
plus all accrued and unpaid dividends thereon outstanding as at the date of
conversion is divided by the Conversion Price.
3.2 Conversion Procedure
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The conversion right provided for in clause 3.1 may be exercised by
completing and executing a notice of conversion on the certificate or
certificates representing the Series 2 Shares in respect of which the holder
thereof desires to exercise such right of conversion or such other form of
notice approved by the Corporation and by delivering the said notice and
certificate or certificates to the transfer agent for the Series 2 Shares at
any office for the transfer of the Series 2 Shares. The said notice of
conversion shall be signed by such holder or by his duly authorized attorney
or agent, with signature guaranteed in a manner satisfactory to the transfer
agent and shall specify the number of Series 2 Shares which the Series 2
Holder desires to have converted. The transfer form in the certificate or
certificates in question need not be endorsed, except in the circumstances
contemplated by clause 3.3. If less than all the Series 2 Shares represented
by a certificate or certificates are to be converted, the Series 2 Holder
shall be entitled to receive, at the expense of the Corporation, a new
certificate representing the Series 2 Shares represented by the certificate or
certificates surrendered as aforesaid which are not to be converted.
3.3 Person to Whom Common Shares will be Issued
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On any conversion of Series 2 Shares the share certificates for Common
Shares resulting therefrom shall be issued at the expense of the Corporation
in the name of the registered holder of the Series 2 Shares converted or in
such name or names as such registered holder may direct in writing, provided
that such registered holder shall pay any applicable security transfer taxes.
In any case where the Common Shares are to be issued in the name of a person
other than the holder of the converted Series 2 Shares, the transfer form on
the back of the certificates in question shall be endorsed by the registered
holder of the Series 2 Shares or his duly authorized attorney or agent, with
signature guaranteed in a manner satisfactory to the transfer agent.
3.4 Effective Date of Conversion
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Each Series 2 Holder whose shares are to be converted in whole or in
part (or any other person or persons in whose name or names any certificates
representing Common Shares are issued as provided in clause 3.3) shall be
deemed to have become the holder of record of the Common Shares into which
such Series 2 Shares are converted, for all purposes, on the respective dates
of receipt by the transfer agent of the certificate or certificates
representing the Series 2 Shares to be converted as provided in clause 3.2,
notwithstanding any delay in the delivery of the certificate or certificates
representing the Common Shares into which such Series 2 Shares have been
converted and, effective as of and throughout such respective dates, the
Series 2 Holder shall cease to be registered as the holder of record of the
Series 2 Shares so converted.
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3.5 Adjustment of Conversion Rate
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3.5.1 If and whenever at any time and from time to time the
Corporation shall (i) subdivide, redivide or change its then
outstanding Common Shares into a greater number of Common
Shares, (ii) reduce, combine or consolidate or change its then
outstanding Common Shares into a lesser number of Common Shares,
or (iii) issue Common Shares (or securities exchangeable or
convertible into Common Shares) to the holders of all or
substantially all of its then outstanding Common Shares by way
of stock dividend or other distribution (other than a stock
dividend paid in the ordinary course) (any of such events being
herein called a "Common Share Reorganization"), the Conversion
Rate shall be adjusted effective immediately after the record
date at which the holders of Common Shares are determined for
the purpose of the Common Share Reorganization to provide that
each Series 2 Holder shall thereafter be entitled to receive
such number of Common Shares as he would have been entitled to
receive had he exercised his conversion rights immediately prior
to such Common Share Reorganization.
3.5.2 If and whenever there is a capital reorganization of the
Corporation not otherwise provided for in this clause 3.5 or a
consolidation, merger, arrangement or amalgamation (statutory or
otherwise) of the Corporation with or into another body
corporate (any such event being called a "Capital
Reorganization"), any Series 2 Holder who has not exercised his
right of conversion prior to the record date for such Capital
Reorganization shall be entitled to receive and shall accept,
upon the exercise of such right at any time after the record
date for such Capital Reorganization, in lieu of the number of
Common Shares to which he was theretofore entitled upon
conversion, the aggregate number of shares or other securities
of the Corporation or of the corporation or body corporate
resulting, surviving or continuing from the Capital
Reorganization that such holder would have been entitled to
receive as a result of such Capital Reorganization if, on the
record date, he had been the registered holder of the number of
Common Shares to which he was theretofore entitled upon
conversion, subject to adjustment thereafter in accordance with
provisions the same, as nearly as may be possible, as those
contained in this clause 3.5; provided that no such Capital
Reorganization shall be carried into effect unless all necessary
steps shall have been taken so that the Series 2 Holder shall
thereafter be entitled to receive such number of shares or other
securities of the Corporation or of the corporation or body
corporate resulting, surviving or continuing from the Capital
Reorganization.
3.5.3 In case of any reclassification of, or other change in, the
outstanding Common Shares other than a Common Share
Reorganization or a Capital Reorganization, the right of
conversion shall be adjusted immediately after the record date
for such reclassification or other change so that Series 2
Holders shall be entitled to receive, upon the exercise of such
right at any time after the record date of such reclassification
or other change, such shares, securities or rights as they would
have received had such Series 2 Shares been converted into
Common Shares immediately prior to such record date subject to
adjustment thereafter in accordance with provisions, the same as
nearly may be possible, as those contained in this clause 3.5.
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3.6 Entitlement to Dividends
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Each Series 2 Holder on the record date for any dividend declared
payable on the Series 2 Shares shall be entitled to such dividend
notwithstanding that any Series 2 Share owned by him is converted after such
record date and before the payment date of such dividend. The registered
holder of any Common Share resulting from any conversion effected pursuant to
this Section 3 shall be entitled to rank equally with the registered holders
of all other Common Shares in respect of all dividends declared payable to
holders of Common Shares of record on or after the date of conversion.
3.7 Avoidance of Fractional Shares
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In any case where a fraction of a Common Share would otherwise be
issuable on conversion of one or more Series 2 Shares, the Corporation shall,
at its option, either (i) adjust such fractional interest by payment by check
in an amount equal to the then current market value of such fractional
interest or (ii) issue in respect of such fraction a scrip certificate
transferable by delivery entitling the holder thereof and of other similar
certificates aggregating one full Common Share, upon surrender of such
certificates at such place as may be designated therein, to obtain from the
Corporation a full Common Share and to receive a share certificate therefor;
such checks shall be payable to the holders thereof in lawful money of the
United States at par at any branch in the United States of the Corporation's
bankers for the time being and such scrip certificates shall be in such form
and shall be subject to such terms and conditions as the directors may
determine and shall provide that the holder thereof shall not thereby be a
shareholder and shall not be entitled to receive dividends or to any other
rights of a shareholder. The amount of any cash adjustment shall equal the
current market value of such fractional interest computed on the basis of the
last sale price (or average of the bid and asked prices if there were no
sales) per share for the Common Shares on the NASDAQ Stock Market (or, if such
shares are not then listed and posted for trading on such stock exchange, on
such stock exchange or quotation system through which such shares are listed
and posted for trading as may be selected by the board of directors) on the
business day next preceding the conversion date. In the event that the Common
Shares of the Corporation are not listed on any stock exchange or through any
quotation system the current market value shall be determined by the board of
directors which determination shall be conclusive.
4. REDEMPTION
4.1 Optional Redemption
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4.1.1 The Corporation, upon giving notice as hereinafter provided, may
redeem all at any time and part from time to time of the then
outstanding Series 2 Shares, on payment for each share to be
redeemed of the Issue Price together in each case with an amount
equal to all accrued and unpaid cumulative preferential
dividends thereon calculated to but excluding the date fixed for
redemption, the whole constituting and herein
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referred to as the "Redemption Price". The Redemption Price
shall be adjusted in the event of any subdivision, redivision,
reduction, combination or consolidation of the outstanding
Series 2 Shares to provide that the Series 2 Holders shall
thereafter be entitled to receive the same amount in respect of
the Redemption Price as they would have been entitled to receive
had the Corporation redeemed the Series 2 Shares prior to the
occurrence of any such event.
4.2 Partial Redemption
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If less than all the Series 2 Shares are at any time to be redeemed,
the shares to be redeemed shall be selected by lot or in such other manner as
the board of directors may deem equitable or, if the board of directors so
determines, on a pro rata basis, disregarding fractions, according to the
number of Series 2 Shares held by each of the registered holders thereof. If
less than all of the Series 2 Shares are at any time to be redeemed and a
Series 2 Holder has duly exercised his right to convert into Common Shares all
or any part of the number of Series 2 Shares held by such holder which have
been called for redemption, the number of Series 2 Shares held by such Series
2 Holder to be redeemed shall be reduced by the number (but not exceeding the
number of Series 2 Shares held by such Series 2 Holder called for redemption)
of Series 2 Shares in respect of which such registered holder has duly
exercised his right to convert into Common Shares. If only a part of the
Series 2 Shares represented by any certificate shall be redeemed, a new
certificate representing the balance of such shares shall be issued to the
holder thereof at the expense of the Corporation upon presentation and
surrender of the first mentioned certificate.
4.3 Method of Redemption
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4.3.1 In any case of redemption of Series 2 Shares, the Corporation
shall not less than 10 days and not more than 45 days before the
date specified for redemption send by prepaid first class mail
or deliver to the registered address of each person who at the
date not more than 50 days prior to the date of mailing or
delivery is a Series 2 Holder to be redeemed a notice in writing
of the intention of the Corporation to redeem the Series 2
Shares registered in the name of such holder. Accidental
failure or omission to give such notice to one or more holders
shall not affect the validity of such redemption, but upon such
failure or omission being discovered notice shall be given
forthwith to such holder or holders and such notice shall have
the same force and effect as if given in due time. Such notice
shall set out the number of Series 2 Shares held by the person
to whom it is addressed which are to be redeemed, the Redemption
Price, the date specified for redemption and the place or places
at which holders of Series 2 Shares may present and surrender
such shares for redemption.
4.3.2 On the date so specified for redemption, the Corporation shall
pay or cause to be paid to or to the order of the Series 2
Holders to be redeemed the Redemption Price of such shares on
presentation and surrender of the certificate or certificates
representing the Series 2 Shares called for redemption at the
registered office of the Corporation or any other place or
places specified in the notice of redemption. Payment in
respect of Series 2 Shares being redeemed
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shall be made by check payable to the holder thereof in lawful
money of the United States at par at any branch in the United
States of the Corporation's bankers for the time being.
4.3.3 From and after the date specified for redemption in any such
notice of redemption, the Series 2 Shares called for redemption
shall cease to be entitled to dividends or any other
participation in the assets of the Corporation and the holders
thereof shall not be entitled to exercise any of their other
rights as shareholders in respect thereof unless payment of the
Redemption Price shall not be made upon presentation and
surrender of the certificates in accordance with the foregoing
provisions, in which case the rights of the holders shall remain
unaffected.
4.3.4 The Corporation shall have the right at any time on or after the
mailing or delivery of notice of its intention to redeem Series
2 Shares to deposit the Redemption Price of the Series 2 Shares
so called for redemption, or of such of the Series 2 Shares
which are represented by certificates which have not at the date
of such deposit been surrendered by the holders thereof in
connection with such redemption, to a special account in any
specified United States bank named in such notice of redemption
or in a subsequent notice to the registered holders of the
shares in respect of which the deposit is made, to be paid
without interest to or to the order of the respective Series 2
Holders whose shares have been called for redemption, upon
presentation and surrender to such bank of the certificates
representing such shares. Upon such deposit being made, the
Series 2 Shares in respect of which such deposit shall have been
made shall be deemed to have been redeemed and the rights of the
holders thereof after such shall be limited to receiving their
proportion (less any tax required to be deducted or withheld
therefrom) of the amount so deposited without interest, upon
presentation and surrender of the certificate or certificates
representing the Series 2 Shares being redeemed. Any interest
allowed on any such deposit shall belong to the Corporation.
4.3.5 Redemption moneys that are represented by a check which has not
been presented to the Corporation's bankers for payment or that
otherwise remain unclaimed (including moneys held on deposit in
a special account as provided for above) for a period of 5 years
from the date specified for redemption shall be forfeited to the
Corporation.
5. RESTRICTIONS ON DIVIDENDS, RETIREMENT AND ISSUANCE OF SHARES
While any Series 2 Shares are outstanding, the Corporation shall not,
without the approval of the holders of Series 2 Shares given as hereinafter
specified:
(a) declare, set aside for payment or pay any dividends on or make
distributions on or in respect of any Junior Shares (other than
dividends consisting of Junior Shares); or
(b) call for redemption, redeem, purchase, retire or acquire for value or
distribute in respect of any Junior Shares (except to the extent and
out of net cash proceeds received by the Corporation from a
substantially concurrent issue of Junior Shares); or
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(c) call for redemption, redeem, purchase or otherwise retire or acquire
for value less than all of the Series 2 Shares outstanding;
unless, in each such case, all dividends then payable on the Series 2 Shares
then outstanding accrued up to and including the dividends payable on the
immediately preceding respective date or dates for the payment of dividends
thereon shall have been declared and paid or set apart for payment or unless
such action has been approved by the Series 2 Holders.
6. LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event of any Liquidation Distribution, each Series 2 Holder
shall be entitled to receive before any amount shall be paid by the
Corporation or any assets of the Corporation shall be distributed to
registered holders of shares ranking as to capital junior to the Series 2
Shares in connection with the Liquidation Distribution, an amount equal to the
stated capital per share of all Series 2 Shares held by such holder, together
with an amount equal to all accrued but unpaid cumulative dividends thereon.
After payment to the Series 2 Holders of the amount so payable to them, they
shall not be entitled to share in any further distribution of assets of the
Corporation.
7. VOTING RIGHTS
Except as otherwise required by law, the holders of the Series 2 Shares
shall not be entitled, as such, to receive notice of or attend or vote at any
meeting of shareholders of the Corporation other than a meeting of Series 2
Holders.
8. AMENDMENTS TO SERIES 1 PROVISIONS
These Series 2 Provisions may be repealed, altered, modified, amended
or varied only with the prior approval of the holders of the Series 2 Shares
given in the manner provided in Section 9 hereof in addition to any other
approval required by any statutory provision of like or similar effect
applicable to the Corporation, from time to time in force.
9. CONSENTS AND APPROVALS
9.1 The approval of the Series 2 Holders with respect to any and all
matters may be given by one or more consents in writing signed by the holders
of at least 2/3 of the issued and outstanding Series 2 Shares or by a
resolution passed by at least 2/3 of the votes cast at a meeting of the Series
2 Holders duly called for that purpose and held upon at least 10 days' notice,
at which the holders of at least 1/3 of the outstanding Series 2 Shares are
present or represented by proxy. If at any such meeting the holders of 1/3 of
the outstanding Series 2 Shares are not present or represented by proxy within
one-half hour after the time appointed for such meeting, then the meeting may
be adjourned to such date being not less than 7 days later and to such time
and place as may be appointed by the chairman of the meeting.
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9.2 The formalities to be observed with respect to the giving of notice of
any such meeting and the conduct thereof shall be those from time to time
prescribed by the by-laws of the Corporation with respect to meetings of
shareholders.
9.3 On every vote taken at every such meeting or adjourned meeting every
Series 2 Holder shall be entitled to one vote in respect of each Series 2
Share of which he is the registered holder.
10. NOTICES
10.1 Any notice required or permitted to be given to any Series 2 Holder
shall be sent by first class mail, postage prepaid, or delivered to such
holder at his address as it appears on the records of the Corporation or, in
the event of the address of any such shareholder not so appearing, to the last
known address of such shareholder. The accidental failure to give notice to
one or more of such shareholders shall not affect the validity of any action
requiring the giving of notice by the Corporation. Any notice given as
aforesaid shall be deemed to be given on the date upon which it is mailed or
delivered.
<PAGE> 1
DEBT SETTLEMENT AGREEMENT
THIS AGREEMENT is dated for reference the 30th day of November, 1999,
BETWEEN:
DRUMMOND FINANCIAL CORPORATION,
c/o 1250 - 400 Burrard Street, Vancouver, B.C.
(hereinafter referred to as the "Creditor")
OF THE FIRST PART
AND:
ICHOR CORPORATION, of 300 Oxford Drive,
Suite 200, Monroeville, PA 15146-2343
(hereinafter referred to as the "Corporation")
OF THE SECOND PART
WHEREAS:
A. The Corporation is indebted to the Creditor and the Creditor has agreed
to accept payment of the said indebtedness in the amount of $972,060.00
(the "Indebtedness") by delivery of 5% Cumulative Convertible
Redeemable Preferred Shares, Series 2 of the Corporation having rights,
privileges, restrictions and conditions which substantially conform to
those contemplated by Schedule "A" hereto (the "Preferred Shares") as
hereinafter set forth;
B. The Creditor has agreed to accept the issuance of Preferred Shares in
the capital of the Corporation at a deemed price of $10.00 per
Preferred Share in full discharge and complete satisfaction of the
Indebtedness and to grant the Corporation a release on receipt of the
Preferred Shares;
NOW THEREFORE this agreement witnesseth that in consideration of the premises
and the mutual covenants and agreements hereinafter contained and the sum of
$10.00 paid by each party to the other (the receipt of which is hereby
acknowledged) and other good and valuable consideration the parties hereto
COVENANT AND AGREE AS FOLLOWS:
<PAGE> 2
2
1. Upon creation of the Preferred Shares, the Corporation shall forthwith
issue and deliver a certificate representing the Preferred Shares to
the Creditor in full settlement and satisfaction of the Indebtedness to
the Creditor at the address first above written.
2. The Creditor hereby covenants with the Corporation that he will accept
the issuance and delivery of a certificate representing the Preferred
Shares from the Corporation at any time up to 5:00 p.m. on or before
the 31st day of December, 1999 in full settlement and satisfaction of
the Indebtedness, and hereby absolutely releases and fully discharges
the Corporation from the Indebtedness. In the event that the Preferred
Shares have not been delivered to the Creditor by December 31, 1999,
the Creditor may, at its option, rescind this agreement, whereupon this
agreement shall be terminated with effect from the date hereof.
3. The Creditor represents and warrants to the Corporation and covenants
with the Corporation that:
(a) it is a company duly incorporated and existing under the laws of
its incorporating jurisdiction and at the closing date will have
the power and capacity to own the Preferred Shares and to enter
into this agreement and to carry out its terms and conditions to
the full extent;
(b) the acceptance of the Preferred Shares in lieu of payment has
been validly authorized by all necessary corporate acts;
(c) the Creditor is purchasing the Preferred Shares as principal and
is not a partnership, syndicate, trust, or unincorporated
organization;
(d) the Creditor is, by virtue of its net worth and investment
experience, or by virtue of consultation with or advice from a
person who is not a promoter of the Corporation and is a
registered adviser or registered dealer, able to evaluate the
merits of the investment in the Preferred Shares based upon
information requested of or presented by the Corporation;
(e) the Creditor is not purchasing the Preferred Shares on the basis
of any information respecting the Corporation not generally
known save knowledge of this transaction;
(f) due to the nature and stage of the Corporation's business and
properties the Creditor acknowledges that an investment in the
Preferred Shares must be considered speculative; and
(g) the Creditor understands that the Preferred Shares have not been
registered by the Corporation under the United States Securities
Act of 1933 (the "1933 Act") and that the Corporation does not
plan, and is under no obligation to provide for registration of
the Preferred Shares in the future. Offer or sale of the
Preferred Shares in the
<PAGE> 3
3
United States or to a U.S. person would constitute a violation
of United States law unless made in compliance with the
registration requirements of the 1933 Act or pursuant to an
exemption therefrom. The term "United States" means the United
States of America and includes its territories, possessions and
all areas subject to its jurisdiction; and the term "U.S.
person" has the meaning as defined in Regulation S made under
the 1933 Act.
4. The Corporation represents and covenants, as the case may be, that:
(a) it is duly incorporated and validly existing under the laws of
the State of Delaware;
(b) it has all necessary corporate authority to enter into this
agreement and to effect the issuance of the Preferred Shares
agreed to hereby; and
(c) its shares trade through the National Association of Securities
Dealers Automated Quotation System SmallCap market.
5. In exchange for the Preferred Shares, the Creditor hereby agrees not to
commence any action or proceeding whatsoever against the Corporation
including the filing of any charge, lien or encumbrance against the
Corporation, its properties, or assets, existing or future during the
term of this agreement and this agreement may be pleaded as a defence
to any such action or proceeding commenced and shall deliver to the
Corporation a release of any and all claims related to the subject
matter hereof in a form reasonably satisfactory to the Corporation upon
receipt of the Preferred Shares.
6. Time is of the essence of this agreement.
7. This Agreement shall be governed and enforced in accordance with the
laws of Switzerland, without regard to its conflict of laws and
principles, and the parties hereto agree to submit any dispute
hereunder to the jurisdiction of the courts of the Canton of Geneva.
8. All references to sums of money shall be deemed to refer to the legal
tender of the United States unless otherwise specified.
9. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
10. The parties hereto agree to execute such further and other agreements
as may be necessary to give effect to the meaning and intent of this
agreement.
11. This agreement may be executed in several parts in the same form and by
facsimile and such parts as so executed shall together constitute one
original document, and such parts, if more
<PAGE> 4
4
than one, shall be read together and construed as if all the signing
parties had executed one copy of the said agreement.
IN WITNESS WHEREOF the parties hereto have hereunto executed this agreement as
of the day and year first above written.
DRUMMOND FINANCIAL CORPORATION
By: /s/ Michael J. Smith
------------------------------
Name: Michael J. Smith
----------------------------
Title: Director
---------------------------
ICHOR CORPORATION
By: /s/ Roy Zanatta
------------------------------
Name: Roy Zanatta
----------------------------
Title: Director
---------------------------
